SE Texas Record

Wednesday, September 18, 2019

Paxton part of coalition asking Federal Energy Regulatory Commission to reduce utility rates

By Sara McCleary | Jan 16, 2018


AUSTIN – Texas Attorney General Ken Paxton is taking part in a bipartisan coalition aimed at reducing consumers’ utility rates as a result of recent tax reforms.

On Jan. 1, corporate income tax rates were reduced from 35 percent to 21 percent, according to a press release from Paxton's office. Paxton, along with representatives of 17 other states, is now urging the Federal Energy Regulatory Commission (FERC) to allow public utilities companies to pass on their savings to citizens by allowing them to reduce rates.

“Unless the Commission adjusts the public utilities’ revenue requirements to reflect this federal corporate income tax reduction, utility customers nationwide will be overpaying for their electric and gas service by hundreds of millions of dollars,” reads a letter sent by the coalition to the FERC chairman and commissioners dated Jan. 9.


Texas Attorney General Ken Paxton

The state representatives’ letter argues that consumers would be best off if the FERC acts immediately. 

“While the state advocates recognize that many of the public utilities are subject to ‘formula’ or stated rates, the state advocates ask the commission to consider changing the appropriate formulas now, rather than waiting to true-up later,” reads the letter. “Doing so would ensure that customers promptly receive the full economic benefit of the tax reduction.”

The letter goes on to request that the FERC sets a refund date from which point customers would be eligible for repayment for an over-collection due to delayed action.

The letter concludes with a nod to the past, noting that the commission has acting to reduce consumers’ rates based on federal income tax reductions in the past. 

“We call on the commission to use its experience and expertise, with stakeholder input, to determine appropriate procedural mechanisms to discover information about the scope of over-collections at issue, the types of voluntary rate reductions or refunds that can be implemented by the public utilities in an expedited manner under existing commission rules and precedent, and the best way to ensure that customers are not harmed by any delay in making the appropriate changes,” it says.

In a press release issued Jan. 10, AG Paxton emphasized his enthusiasm at being part of the group calling for action from the FERC. 

“I’m thrilled to be part of a bipartisan coalition that recognizes that lower taxes benefit everyone,” said Paxton. “Helping Texans and others around the country by reducing household utility bills is an example of the immediate and positive impact of the president’s tax reform plan. Thanks to the new law, prices will come down and consumers will have more money in their pockets, just as companies are raising wages, paying bonuses and hiring more workers.”

Alongside Paxton’s signature are those of the attorneys general for California, Connecticut, Illinois, Kentucky, Maryland, Massachusetts, Nevada, New York, North Carolina, Rhode Island and Virginia. 

Also represented are the Connecticut Office of Consumer Counsel, the Florida Office of Public Counsel, the Maine Office of the Public Advocate, the New Hampshire Office of the Consumer Advocate, the Rhode Island Division of Public Utilities and Carriers, and the Vermont Department of Public Service.

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Organizations in this Story

Federal Energy Regulatory Commission Texas Office of the Attorney General